Judge says FTC likely overstepped authority in sharing drugmaker pay-for-delay info

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Jul 16 2010

A judge Wednesday criticized the Federal Trade Commission for the "strong possibility" that it "overstepped its bounds and shared confidential information" in a pay-for-delay case between the government and a generic drug company, Reuters reports.

"The FTC has been seeking to interview Watson Pharmaceutical CEO Paul Bisaro as part of its probe of allegations that Cephalon illegally settled patent disputes with generic drug companies by paying them not to bring out a generic version of its marquee sleep disorder drug Provigil." A lawyer for Watson said that a FTC Health Care Division assistant director urged him by telephone to ask Watson to give its exclusivity to generic company Apotex. If it did not do so, the FTC official said the commission would likely reopen an investigation on the generic version of Provigil, court papers state.

U.S. Magistrate "Judge Alan Kay, in an order issued late Tuesday, sharply criticized the FTC. 'The facts before us suggest that the FTC sought to place Watson between a rock and a hard place, where the only way Watson could clear its name and escape further FTC scrutiny was to give in to the pressure the FTC was placing on Watson to enter into a business deal with Apotex,' he wrote in an order." The judge called it a "strong possibility" that the FTC may have shared confidential information about Watson with Apotex (Bartz, 7/14).

Dow Jones Newswires/The Wall Street Journal: "Richard Feinstein, the head of the FTC's bureau of competition, said the commission strongly disagreed with the magistrate judge's preliminary findings. 'The FTC has done nothing improper in this matter, and is simply trying to complete a law enforcement investigation into whether there is an agreement to keep generic drugs off the market and out of the hands of consumers,' Feinstein said in a written statement Wednesday. … The commission is suing Cephalon on antitrust grounds, saying that its Provigil settlements with four other drug makers wrongly delayed generic competition for the drug" (Kendall, 7/14).

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.